Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • Report looks at captured nature of BC’s Oil and Gas Commission August 6, 2019
    From an early stage, BC’s Oil and Gas Commission bore the hallmarks of a captured regulator. The very industry that the Commission was formed to regulate had a significant hand in its creation and, too often, the interests of the industry it regulates take precedence over the public interest. This report looks at the evolution […]
    Canadian Centre for Policy Alternatives
  • Correcting the Record July 26, 2019
    Earlier this week Kris Sims and Franco Terrazzano of the Canadian Taxpayers Federation wrote an opinion piece that was published in the Calgary Sun, Edmonton Sun, Winnipeg Sun, Ottawa Sun and Toronto Sun. The opinion piece makes several false claims and connections regarding the Corporate Mapping Project (CMP), which we would like to correct. The […]
    Canadian Centre for Policy Alternatives
  • Rental Wage in Canada July 18, 2019
    Our new report maps rental affordability in neighbourhoods across Canada by calculating the “rental wage,” which is the hourly wage needed to afford an average apartment without spending more than 30% of one’s earnings.  Across all of Canada, the average wage needed to afford a two-bedroom apartment is $22.40/h, or $20.20/h for an average one […]
    Canadian Centre for Policy Alternatives
  • Towards Justice: Tackling Indigenous Child Poverty in Canada July 9, 2019
    CCPA senior economist David Macdonald co-authored a new report, Towards Justice: Tackling Indigenous Child Poverty in Canada­—released by Upstream Institute in partnership with the Assembly of First Nations (AFN) and the Canadian Centre for Policy Alternatives (CCPA)—tracks child poverty rates using Census 2006, the 2011 National Household Survey and Census 2016. The report is available for […]
    Canadian Centre for Policy Alternatives
  • Fossil-Power Top 50 launched July 3, 2019
    What do Suncor, Encana, the Royal Bank of Canada, the Fraser Institute and 46 other companies and organizations have in common? They are among the entities that make up the most influential fossil fuel industry players in Canada. Today, the Corporate Mapping Project (CMP) is drawing attention to these powerful corporations and organizations with the […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers


Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Money Runners for Marx

On Bloomberg today is a piece by George Magnus, senior economic advisor at UBS, on the relevance of Marxian ideas.

Policy makers struggling to understand the barrage of financial panics, protests and other ills afflicting the world would do well to study the works of a long-dead economist: Karl Marx. The sooner they recognize we’re facing a once-in-a-lifetime crisis of capitalism, the better equipped they will be to manage a way out of it …

Consider, for example, Marx’s prediction of how the inherent conflict between capital and labor would manifest itself. As he wrote in “Das Kapital,” companies’ pursuit of profits and productivity would naturally lead them to need fewer and fewer workers, creating an “industrial reserve army” of the poor and unemployed: “Accumulation of wealth at one pole is, therefore, at the same time accumulation of misery.”

… To put Marx’s spirit back in the box, policy makers have to place jobs at the top of the economic agenda, and consider other unorthodox measures. The crisis isn’t temporary, and it certainly won’t be cured by the ideological passion for government austerity.

Here are five major planks of a strategy whose time, sadly, has not yet come.

First, we have to sustain aggregate demand and income growth, or else we could fall into a debt trap along with serious social consequences. Governments that don’t face an imminent debt crisis — including the U.S., Germany and the U.K. — must make employment creation the litmus test of policy. In the U.S., the employment-to-population ratio is now as low as in the 1980s. Measures of underemployment almost everywhere are at record highs. Cutting employer payroll taxes and creating fiscal incentives to encourage companies to hire people and invest would do for a start.

Second, to lighten the household debt burden, new steps should allow eligible households to restructure mortgage debt, or swap some debt forgiveness for future payments to lenders out of any home price appreciation.

Third, to improve the functionality of the credit system, well-capitalized and well-structured banks should be allowed some temporary capital adequacy relief to try to get new credit flowing to small companies, especially. Governments and central banks could engage in direct spending on or indirect financing of national investment or infrastructure programs.

Fourth, to ease the sovereign debt burden in the euro zone, European creditors have to extend the lower interest rates and longer payment terms recently proposed for Greece. If jointly guaranteed euro bonds are a bridge too far, Germany has to champion an urgent recapitalization of banks to help absorb inevitable losses through a vastly enlarged European Financial Stability Facility — a sine qua non to solve the bond market crisis at least.

Fifth, to build defenses against the risk of falling into deflation and stagnation, central banks should look beyond bond- buying programs, and instead target a growth rate of nominal economic output. This would allow a temporary period of moderately higher inflation that could push inflation-adjusted interest rates well below zero and facilitate a lowering of debt burdens.

Enjoy and share:


Comment from Todd
Time: August 29, 2011, 11:20 am

“policy makers have to place jobs at the top of the economic agenda, and consider other unorthodox measures.”

Hoo! That gave me a good belly-laugh . . . !

Comment from Murray Reiss
Time: August 29, 2011, 1:07 pm

I doubt Marx would have considered this a “once-in-a-lifetime crisis of capitalism.” More likely, he would have seen it as the latest in a recurrent series of crises endemic to capitalism at its very core.

Comment from Victor
Time: August 30, 2011, 9:26 am

A US report draws this conclusion “…history teaches us that curtailing budget deficits prior to the end of a balance sheet recession leads to a deflationary recession. This time is no different….” We need a massive federal jobs stimulus or suffer the consequences.

Comment from Denise Freedman
Time: August 30, 2011, 7:28 pm

While I’m no expert on Marx or Marxism, the question occupying Western Marxists since the end of WWI has not been what this “economist” envisions, another in a series of crises, but why has there been no revolution–when all the circumstances have been ripe, and ripe, again.

It has been a long time since Marx.

Since then there has been Lukasc, the Frankfort School, Gramsci, and into the present, Agger and Jacoby.

When the world has been turned on its head, when politics is played out everywhere EXCEPT in the places we call political, when it is the LESS developed countries that declare revolution–after decades of being oppressed by that very fountain of democracy, the United States–it seems rather quaint capitalists and their publicists now propose that Marx, and his prescriptions during the age of competitive capitalism be applied to the age of monopoly capitalism.

What will these numbers do?

They will rally the capitalists themselves!

The historical circumstances, the totality, today, is not the same as it was post WWII. Proposing the return to something that maybe was, but maybe wasn’t as it seems through the very lens that creates the suffering of today, seems a nice story told to the children of the 1%.

Comment from Travis Fast
Time: September 6, 2011, 8:05 pm

“…the question occupying Western Marxists since the end of WWI has not been what this “economist” envisions, another in a series of crises, but why has there been no revolution–when all the circumstances have been ripe, and ripe, again.”

A Bizarre commentary. The question perplexing that generation of Marxists was how the dynamics of reform capitalism had blunted the revolutionary spirit of the proletarian. An equally daft problematic in some senses but not what you have outlined.

Write a comment

Related articles